If you manage a Strategic Business Unit within a large corporate, then everything we cover in the marketing matrix website must be aligned with the wider corporate strategy.
And this page will make sure you understand exactly what that is…
Or, if you are a SME (small / medium enterprise) business owner, then being in touch with the considerations that large corporates make about strategy can help you evolve your marketing plan and business growth.
So let’s review these top-level ideas of corporate strategy now.
Leading businesses concentrate on three areas:
- Customers – who shall we target and how shall we build relationsips to maximise life time value with best possible profit margins in a market category with rabid buyers
- Competitors – what are we up against, and how can we rise above?
- Company – organizational strengths and weaknesses
Do you want short-term profits or long-term growth?
- Operationally strong businesses focus on efficiency – doing what they have always done, and trying to do it better
- Strategically strong businesses focus on effectiveness. What should they be doing well to survive and prosper for long-term growth
In Eli Goldratt’s book The Goal, he identifies quite simply that MONEY is the goal of business, from which all other pursuits are measured by.
Money in business comes from profitability, or ‘return’.
Return reflects the relationship between profit generated from the money invested in the business, which leads to three linked financial criteria that provide the framework for results management:
Return (profit/assets) = Margin (profit/sales) x Utilisation (sales/assets)
Return is created through 2 sub-goals.
- Market share
Whatever form your companies Balanced Scorecard takes, it should be used to define the elements that contribute to Growth, Market Share, and Return.
Performance improvements can be grouped into 3 areas:
- Customer experience management (beyond CRM)
- Organizational development
- Financial control
And there are several layers of strategic analysis (like peeling an onion)
- Environmental analysis – SWOT
- Industry analysis – 5 Forces
- Corporate analysis – SERF
What we are looking for are the underlying constraints of optimal performance management.
Ms. Scheinkopf identified three types of constraints: physical, policy, and paradigm constraints. Physical constraints include materials, capacity (which includes time, space, or capability), and the market. Policy constraints might be rules, training, and measurements. These, in turn, are driven by paradigm constraints ? mental models and assumptions that help formulate the policies.
?Look at the company as if it were a chain,? Ms. Scheinkopf suggested. ?Identify the weakest link. What is the link that will inhibit us from making the most money?”
Elevating the constraint should be a strategic decision at the highest levels.
Business strategy can divide into 2 core areas:
- Corporate strategy – Regarding the organization as a whole, and defines the industries/markets in which the corporate will oeprate and sets the direction in terms fo development of the overall portfolio. Provides the basis for the allocation of resources. Uses analytics techniques such as environmental mapping, industry mapping, and SWOT analysis.
- Business Unit Strategy – Concerned with the component parts of the organization (SBUs) and defines how the business will compete in the market and how it will be positionined in relation to competitors.
In corporate strategy, objectives should be developed before considering how limited your budget is right now. First outline the big vision. Only then create milestones based on budgeting. Do not limit your vision just because you have a limited budget for the short-term.
Too often market strategies are evaluated and set at too high a level (corporate) which leads to a poor fit. From considerations of corporate strategy, we can now focus on the elements of Strategic Business Units and marketing strategy.
The Career Troika (business, marketing, and productivity) involves many strategies, as outlined here:
- Corporate Strategy
- Business Strategy (Balanced Scorecard)
- Marketing Strategy
- Sales Strategy
- Customer Strategy
- Product Development Strategy
- Organizational Strategy (resource management, process management, knolwedge management)
- Personal Strategy (efficiency, planning skills, interpersonal skills, etc.)
In what Markets will your business unit operate? What risk-levels, and cost of capital is it constrained by? What returns must it look to achieve?
By what Positioning in the market place can you achieve the business objectives? The Marketing Strategy involves balancing capabilities with target customer insight, and competitive analysis. See the Marketing Strategy page.
How will direct sales teams complement the marketing engine?
What processes will maximise and optimise the customer experience for the full customer life cycle?
Product Development Strategy
What NPD (new product development) must occur, what is happening in the marketplace, and what is the current product road-map?
What internal culture and set of operational processes and procedures will best serve the marketing plan, business objectives, and corporate strategy?
Continue at the Preparation page.